October 26, 1999

Regulators Expected to Lighten Up on Internet Campaigns

By REBECCA FAIRLEY RANEY

n the conflict between the need to regulate political campaigns and the desire to encourage voters to get involved in politics on the Internet, federal regulators have historically leaned toward restrictions on the activities of individual voters online.

This week, however, the Federal Election Commission is expected to take a more relaxed approach toward Internet campaigning in decisions on two cases.

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The cases, which are on the commission's agenda for Thursday, address whether several types of Internet activity count as contributions that must be reported to the FEC: online debates sponsored by a nonpartisan group, Web sites set up by supporters without the knowledge of campaign officials, and links from a Web site to an official campaign site.

The Democracy Network, a nonprofit and nonpartisan group in Los Angeles that has sponsored online debates since 1994, asked the FEC to clarify its position on such debates. Questions about "fan" sites and linking were raised by Benjamin L. Ginsberg, a lawyer for the Presidential campaign of George W. Bush.

Draft opinions on the issues prepared by FEC staff lawyers indicate that the commission will allow online debates like the ones conducted by the Democracy Network. Also, the opinion on the Bush committee's questions states that campaigns need not be held accountable for Web sites built by supporters. This would mean that the sites would not count as contributions that could potentially push campaigns over spending limits.

The draft opinion also states that a Web site created by a volunteer on his home computer would not be considered a campaign contribution, and that the value of links would be based on whether a Web site's manager normally charged for links.

But even though the draft opinion absolves the campaign of responsibility for volunteer sites, it offers no guidance on the legal status of individuals who create the sites. The issue of whether individuals must file as political action committees has been an important one in the clash between election laws and Internet campaigning.

"The opinion protects the interests of the organized campaigns and their volunteers, but leaves the unaffiliated citizen in limbo," said James X. Dempsey, senior staff counsel for the Center for Democracy and Technology, which issued a report on FEC regulation last month. "The little guy is left in limbo. That's what they leave unanswered."

In general, Internet campaigning has befuddled election regulators. Election law was constructed in the 1970s, and the regulations covering independent campaigning were written to cover interest groups spending thousands of dollars on mass mailings and television advertising. The spirit of the law did not take into account the possibility that even teen-agers might be able to reach thousands of people electronically. The approach revealed in the draft opinions reflects a drastic departure from the commission's early stance on Internet issues.

Others caution that the FEC should not open the door to electronic fraud.

"They obviously have the opportunity to send a signal to people that they do recognize the differences posed by the Internet," Dempsey said. "It's obviously going to be closely watched, and they have to be very sensitive to the chilling effect that they have created."

An opinion issued by the commission late last year found that a Web site built by Leo Smith, a supporter of a Congressional candidate in Connecticut, should be treated as a contribution. Smith, who was acting as an individual, was found to be equivalent to a professional political action committee under federal regulations. The commissioners also found that the costs of Smith's computer, hardware, software, site hosting and all related expenses must be factored into the total contribution -- an accounting method that would push anyone who built a Web site over the $1,000 limit that requires registration as a political action committee.

Critics said the commission's stance in that case would chill political speech online by requiring anyone who supported or opposed a campaign on the Internet to hire a lawyer and an accountant to meet federal reporting requirements.

A variety of advocacy groups have taken positions and issued reports on the issue of online campaigning in recent weeks, including the CDT, the Aspen Institute, the Alliance for Better Campaigns and the American Civil Liberties Union.

The Aspen Institute, a nonprofit educational group, held a three-day conference with the American Bar Association recently that involved experts in election law, Internet campaigning and political science.

The group recommended that the FEC approach the issue with a presumption that the use of the Internet should be encouraged as a way to promote citizen participation in politics. It also recommended that a link from one Web site to another should be considered information instead of a contribution, that any regulations should be subject to regular review because of rapid changes in technology, and that a new top-level domain, like ".pol," should be created as a space for official campaign site addresses, so voters are able to tell official sites from political parodies.

But while many vocal groups are encouraging minimal regulation of Internet campaigning, others caution that the FEC should not open the door to electronic fraud. For example, special interest groups could pose as regular citizens and reach thousands of people with an online campaign.

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"There's a sort of mantra that people are chanting, that everything that has to do with the Internet shouldn't be regulated," said Don Simon, executive vice president of Common Cause, a group that lobbies for campaign finance reform. Decisions should be made, he said, "with an eye toward not allowing the Internet to become a new loophole for the new infusion of corporate money and soft money into campaigns."

Ginsberg, the Bush lawyer, reserved judgment on the outcome of the FEC's decision. "It's a good start, and we'll see what the commission will do to it," he said. "It's a good starting point for putting on the table the issues for which campaigns need guidance."

Trevor Potter, the lawyer who handled the Democracy Network's case, said the group's work does not fit into the regulatory scheme presented in election laws, which puts debates, voter guides and nonprofit activity in separate boxes. The Internet, he said, "takes out the walls from those boxes."

Potter, a former chairman of the FEC, said he hoped the commission would find a way to allow the Democracy Network's activities without forcing it to conform to existing regulations.

Though the results of these two cases could sketch out the FEC's approach to the medium, Internet-related questions will no doubt continue to surface this year. The commission is expected to issue a "notice of inquiry" on Thursday to call for public input on establishing rules to regulate the medium. David M. Mason, the FEC commissioner who prompted the inquiry, said the process could take more than a year.

"We simply don't have the option of sitting back and saying, 'Hands off the Internet,'" he said.

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• Federal Election Commission

• Democracy Network

• George W. Bush

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Rebecca Fairley Raney at rfr@nytimes.com welcomes your comments and suggestions.

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